ConMoto                                                                 Study                                        VALUE...
ConMotoStudy            AUTHORS AND CONTACT PERSONS          CON MOTO_____________________   Page 3              THE MAINT...
ConMoto                                                                                                                   ...
ConMotoStudy            	 THe MainTenance STudy              Value oriented maintenance - the strategic dimension         ...
ConMoto                                                                                                                   ...
ConMotoStudy       The pages 5 to 8 and 10 to 22 are not included in this preview. Should you be interested in the whole s...
ConMoto                                                                                                                   ...
ConMoto                                                                                                                   ...
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Maintenance Study

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Why is maintenance important at all? If you consider only business assets in production facilities and related machinery out of all investment goods in Europe, you reach a value of around 9.7 trillion euros in 2008. In Germany alone the equipment replacement value amounted to about 1.9 trillion euros. If you calculate a cross sector maintenance costs rate of 4.8 % (corresponding to the average value identified in this study), direct maintenance costs in European production locations add up to over 4.5 billion euros per year! These figures speak for themselves. Yet maintenance is not only of enormous significance for European enterprises. Our experiences show that
maintenance and asset management, particularly sustainability issues, are also increasingly moving to the forefront in the BRIC states, in the Middle East and in many emerging countries. First of all, in order to meet the resulting high quality and cost related requirements of maintenance systems, a comprehensive overview of the issue is needed. And this is exactly where the ConMoto study “Value oriented maintenance – the strategic dimension of the spanner” comes in. 83 companies and production plants from various sectors were analysed in detail - with amazing results.

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Maintenance Study

  1. 1. ConMoto Study VALUE ORIENTED MAINTENANCE THE STRATEGIC DIMENSION OF THE SPANNERThe Maintenance StudyHighlights• 83 companies and production plants were examined in detail with reference to their mainte- nance and asset management performance• The study shows considerable potential for improvement in all industry sectors analysed• Practically proven design ele- ments on the way to ex ellent c value oriented maintenance are presented• Quick and sustainable imple- mentation results are realisable
  2. 2. ConMotoStudy AUTHORS AND CONTACT PERSONS CON MOTO_____________________ Page 3 THE MAINTENANCE STUDY PREFACE Page 4-22 THE MAINTENANCE STUDY Executive summary Significance of maintenance Maintenance and asset management as a competitive advantage Study based on the results of the ConMoto MaintenanceScoreTest© Graduated model of Maintenance Excellence Status quo in maintenance and asset management - findings and need for action The most effective variables - results by approaching Maintenance Excellence Appendix PREFACE Page 23 AUTHORS AND CONTACT PERSONS Page 24 CON MOTO Our consultancy approach Our company 2
  3. 3. ConMoto Study PREFACE Preface Do you know the feeling? You prepare yourself for a demanding mountain hike, a marathon or a transalpine on your mountain bike. You train, train and train without feeling that youre getting anywhere? Good intentions and back-breaking effort alone only lead to the desi- red level of performance by chance. If you want to reach your bestform, however, you initially need a comprehensive performance diagnosis and, building on this, an individuallyoriented training concept based on specialist knowledge.Top business performances are achieved with the same approach. Deficits have to be recognised and, meta-phorically speaking, training methods have to be changed. In this study ConMoto is systematically showing thestrengths and weaknesses of European companies maintenance management and is providing field tested pro-ven design elements on the way to excellent value oriented maintenance.But why is maintenance important at all? If you consider only business assets in production facilities and relatedmachinery out of all investment goods in Europe, you reach a value of around 9.7 trillion euros in 2008. In Ger-many alone the equipment replacement value amounted to about 1.9 trillion euros. If you calculate a cross sectormaintenance costs rate of 4.8 % (corresponding to the average value identified in this study), direct maintenancecosts in European production locations add up to over 4.5 billion euros per year! These figures speak for themsel-ves. Yet maintenance is not only of enormous significance for European enterprises. Our experiences show thatmaintenance and asset management, particularly sustainability issues, are also increasingly moving to the forefrontin the BRIC states, in the Middle East and in many emerging countries. First of all, in order to meet the resultinghigh quality and cost related requirements of maintenance systems, a comprehensive overview of the issue isneeded. And this is exactly where the ConMoto study “Value oriented maintenance – the strategic dimension ofthe spanner” comes in. 83 companies and production plants from various sectors were analysed in detail - withamazing results.Reach your individual targets, develop your maintenance activities into sustainable value drivers to increase yourcompetitiveness and stay motivated and active for your success tomorrow.YoursNils Blechschmidt 3
  4. 4. ConMotoStudy THe MainTenance STudy Value oriented maintenance - the strategic dimension of the spanner executive summary The production of a successful company today has to be not only efficient but also organised flexibly and with adaptability. To meet these requirements the searching gaze of many company managers is increasingly focussing on maintenance activities. Justifiably so, because value oriented maintenance and asset management are de- cisive for cost effectiveness and flexibility in producing goods. The higher the equipment intensity in a production plant is, the greater the impact of maintenance management. Thus at peak more than 60 % of production costs are directly and indirectly influenced by the efficiency of maintenance activities. In the past few years the ConMoto Consulting Group has thoroughly examined the maintenance activities of 83 companies and production plants in total and has summarised the results in this study. It is clear that many companies are currently a long way from first class maintenance management. If school marks were used, the companies examined would get marks only between "poor" and "satisfactory" for their maintenance management systems. To better classify the conditions characterising maintenance systems (maintenance maturity), ConMoto has developed the graduated model of Maintenance Excellence. If you consider the relationship between the total number of points to the maximum number of points possible (corresponding to Maintenance Excellence) the industry average is only 46 %. The rear light of the study has considerable potential to catch up with a mainte- nance maturity of merely 32 %. Even the best company at 60 % has plenty of room for improvement. In an overall comparison, surprisingly it was precisely the most investment intensive and security sensitive process industry that is weakest with an average of 43 %. But also the best-in-class industrial area “automotive and mechanical engineering” is only in the midfield of the graduated model with an average of 51 %. The analysis of maintenance systems shows considerable potential for improvement within the context of value oriented maintenance. The question remains of what to do to exploit this potential as quickly and sustainably as possible. By combining the current need for action and the respective cost-benefits relation of the implementation areas, five variables could be identified in the study that lead to particularly high gains in efficiency in all the sec- tors examined. Alongside the maintenance strategy these are “in- and outsourcing of services“, “time manage- ment/capacity planning and scheduling“, “process organisation“ and “Key Performance Indicators and costing“. ConMoto has developed a methodical approach proven in various industries for each of these design elements. It demonstrates an efficient way how companies can holistically drive forward the optimisation of their maintenance systems. The target is Maintenance Excellence. The results speak for themselves. It was possible to achieve considerable improvement in all Key Performance Indicators (KPIs). One of the central cost effectiveness KPIs, the maintenance cost rate, was reduced by 23 % for all projects. The effectiveness, measured on the basis of the KPIs “spare parts months of inventory” (-45 %), “Overall Equipment Effectiveness” (+7 %) and “proportion of preventive maintenance” (+155 %), was significantly improved. Regarding order processing management it was possible to optimise the Key Performance Indicators “planning degree” (+40 %) and “urgency rate” (-63 %), thus achieving considerable gains in efficiency. The figures prove that maintenance processes can be a central value driver for improving efficiency, minimising costs and for reducing capital requirements, thus increasing the Return on Captial. By systematically optimising these factors companies can use a decisive lever to position themselves even more successfully in the global competition. 4
  5. 5. ConMoto StudyTo better classify the conditions characterising maintenance systems (maintenance maturity), ConMoto has deve-loped the graduated model of Maintenance Excellence (Figure 7). Efficiency profile process industry Efficiency profile automotive and engineering Efficiency profile other industries Processes Processes ing in g urc in g tso urc 12 St r uc tso ou ices 12 St r uc tso urc 12 St r uc ou ices tur nd erv tur e ou ices tur nd erv e -a fS nd erv e -a fS In -a fS In 10 10 In 10 o o o 8 8 8 . W wor .E . e O to W wor W wor .E . e O to e O to .E or kflo .E or kflo or kflo eas res .E kp .E eas es eas es kp kp lac w incr easu incr easur incr easur lac w lac w 6 6 6 ea ea ea M nd M M nd nd 4 4 4 2 2 2 Planning and Planning and Planning and scheduling scheduling scheduling IT-Tools IT-Tools IT-Tools 0 0 nt ge rt nt nt ge art ge art na e p a me me me Co na e p na e p Co Co ma par stin ma par ma par stin stin S g S S g g Ke t Ke Ke y n y n t y n t Ind Per ff e Ind Per ff e Ind Per ff e ica form Sta lopm ica form Sta lopm ica form Sta lopm tor anc ve tor anc ve tor anc ve s e de s e de s e de Maintenance Maintenance Maintenance strategy strategy strategy 0 12 0 12 0 12 Best process industry Best automotive and engineering industry Best other industries Worst Maintenance Worst Maintenance Worst Maintenance Worst process industry Worst automotive and engineering industry Worst other industries Case Excellence Case Excellence Case Excellence Classification in development levels Bringing up the rear Midtable Leading group Level 6 Level 5 11 12 Life Cycle Level 4 9 10 Asset Life Cycle Level 3 7 8 Asset Innovation 5 6 Integration Level 2 of all relevant Management Proactive Level 1 3 4 processes 1 2 Reactive Disorganised Wooden spoon Stragglers Lower midtable Upper midtable Leaders Innovators Degree of maintenance and asset managment Worst Case Maintenance Excellence Figure 7: Classification of companies according to Maintenance Excellence graduated modelThe individual development levels of the model are clearly defined by the 360 status descriptions of theMaintenanceScoreTest© and are outlined briefly below:Level 1 "Wooden spoon"• Maintenance is disorganised• Maintenance processes are not sufficiently definedLevel 2 “Stragglers“• Strongly reactive maintenance• "Fire-fighting activities" are still predominateLevel 3 “Lower midtable"• Proactive maintenance strategy• Lean principles are basically applied (focus on Overall Equipment Effectiveness, minimising waste, first Key Performance Indicators and visualisation, etc.)Level 4 “upper midtable"• All maintenance processes are linked and support each other (there are no more system gaps)• Maintenance processes are controlled in a target-oriented manner and optimised effectivelyLevel 5 “Leaders“• The entire plant life cycle is considered• Direct and indirect maintenance costs are recorded and evaluated systematically• Maintenance and asset management are improved consistently and continuouslyLevel 6 “innovators“• Orientation not only towards life cycle costs but also on functionality of plant and machinery• The control loop between operators and plant manufacturers is established and preventive maintenance is driven forward innovatively 9
  6. 6. ConMotoStudy The pages 5 to 8 and 10 to 22 are not included in this preview. Should you be interested in the whole study VALUE ORIENTED MAINTENANCE - THE STRATEGIC DIMENSION OF THE SPANNER, please contact: Melanie Sauer Communication Manager ConMoto Consulting Group GmbH Boschetsrieder Str. 69 81379 München Deutschland Telefon +49 (0)89 780 66-138 Fax: +49 (0)89 780 66-101 Email: sauer@conmoto.de © 2011 ConMoto Consulting Group GmbH. All rights reserved. For repeat orders and reprinting authorisation please contact: ConMoto Consulting Group GmbH Boschetsrieder Str. 69 81379 Munich Germany Tel. +49 (0)89 780 66-138 Fax: +49 (0)89 780 66-101 Email: pressestelle@conmoto.de 2 2
  7. 7. ConMoto Study authorsNils Blechschmidt has been a management consultant since 1995 at ConMoto Consulting Group GmbH andsince 2002 he is a Senior Partner and shareholder of the company. He is responsible for the field of "MaintenanceExcellence". As an expert in this area and with well-founded knowledge of various sectors, such as the aerospaceindustry, engineering and plant construction, the car and component supplier industry, process industry (chemi-cals, steel, semi-conductors, pharmaceuticals, food), plastics processing industry and transport technology, hegives numerous lectures. Since 1997 he has been a lecturer at various specialist forums with a focus on Main-tenance Excellence and Lean Production. Before his time at ConMoto, Nils Blechschmidt was employed as theTechnical Head of an aircraft maintenance business for seven years. He completed his education as a Dipl.-Ing.(graduate engineer) in aerospace technology at the University of the Bundeswehr in Munich and gained his MBAat Henley Management College (UK).Markus März is the Director Business Development of ConMoto Consulting Group GmbH. Since joining ConMotoin 2003 he had worked as a management consultant and lastly as a project manager, dealing with controlling andfinance issues, restructuring, value oriented corporate development as well as lean production and maintenance.Before his time at ConMoto, Markus März was employed as an Analyst Private Equity, primarily in due diligence& corporate valuation, at a listed holding and restructuring company. He completed his education as a Dipl.-Kfm.(graduate in business administration) and BSc at the University of Augsburg.Dr. Leonhard Weck is a managing partner of ConMoto Consulting Group GmbH. After a twelve year career as amilitary officer in various applications he was employed at Bosch Siemens Hausgeräte GmbH in Munich for twoyears with responsibility for brown goods logistics. In 1990 he was one of the three founders of the ConMotoConsulting Group. He was involved in building up the company as a managing partner for over four years. In1994 he founded the management consultancy Agamus Consult within the Otto Wolff von Amerongen group ofcompanies and ran the consultancy as managing partner until 2001. Subsequently he took over the managementof the newly-founded Agamus Holding GmbH as managing partner. Under the roof of this company he foundedthree further companies in the areas of data transaction and information logistics. These companies include whatis Crossgate AG today, which has since become one of the largest data transaction platforms in the B2B area.After the death of Otto Wolff von Amerongen, Dr. Weck left the group at the beginning of 2009 and since then hehas again a leading management position in the ConMoto Consulting Group. 2 3
  8. 8. ConMoto Study WWW.CONMOTO.DE ConMoto Consulting Group GmbH, MunichWWW.CONMOTO-CONSULTING.COM Boschetsrieder Str. 69 81379 Munich Germany Tel.: +49 (0)89 780 66-0 Fax: +49 (0)89 780 66-100/-101 ConMoto Consulting Group GmbH, Stuttgart Gerokstr. 11 70184 Stuttgart Our consultancy Management Germany approach Tel.: +49 (0)711 767 79-0 Fax: +49 (0)711 767 79-205 We create advantage! This is the guiding approach of our ConMoto Consulting Group consultancy. Ges.m.b.H, Vienna Schottenring 16 Implementation decides whether 1010 Vienna a project is successful. Therefore, Austria speed, pragmatism and implementa- Tel.: +43 (0)1 585 0 274-0 tion strength distinguish ConMoto’s Fax: +43 (0)1 585 0 274-11 work. The decisive basis is formed by an expert and target oriented analysis ConMoto Consulting Group GmbH, as well as a solid and realistic concept. St. Gallen To achieve this we combine innovative Dr.-Ing. Ralf Feierabend Notkerstr. 10 concepts with the knowledge of what is feasible. 9000 St. Gallen Switzerland Tel.: +41 (0)71 244 08 71 Fax: +41 (0)71 243 18 81 Our company ConMoto Consulting Group GmbH, The ConMoto Consulting Group has Shanghai been supporting companies for more Unit 1606, Time Square than 20 years to secure and improve 93 Huai Hai Zhong Rd. their competitiveness and sustainabili- 200021 Shanghai ty. Around 80 consultants, distributed across our offices in Munich, Stutt- People’s Republic of China gart, Vienna, St. Gallen, Bratislava and Tel.: +86 (0)21 6141 5275 Shanghai, work competently and with Prof. Dr.-Ing. Andreas R. Voegele Fax: +86 (0)21 6141 5276 commitment to realise the best possib- le benefits for our clients. ConMoto Consulting Group, Agamus Consult, Bratislava Our consultants’ high qualifications, ´ Na vršku 8 supplemented by many years of pro- 811 01 Bratislava fessional experience, guarantee the Slovakia pronounced implementation skill that Tel.: +421 (0)2 5441 3304 is necessary to realise the solution Fax: +421 (0)2 5441 0635 concepts we develop together with our clients. Efficient structures and processes, strong innovation skills, ef- fective management systems and the Email: info@conmoto.de sustainable mobilisation of staff are the Web: www.conmoto.de project targets in the context of a pio- www.conmoto-consulting.com neering strategy. Dr. rer. pol. Leonhard Weck

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